Monday, July 13, 2015

The other day, we looked at how health insurance (particularly group plans) will be impacted by the recent SCOTUS ruling on Same Sex Marriage (SSM). Now, the legal beagles over at Legal Insurrection have a very interesting post about the future of liability insurance in this new, enlightened age, and it's not pretty:

As usual when it comes to issues involving Property and Casualty (P&C), I turned to good friend and guru Bill M for his insights:

The reason that coverage in such circumstances would (likely) be declined is that it was an intentional act of violating the law. So if (when?) a church (or synagogue, or mosque) is sued for refusing to perform a SSM, the resulting lawsuit would not be covered. That also means the carrier has no "duty to defend" (basically: provide legal counsel).

Of course, any fines imposed by the state would also be excluded.

This is not quite the same as the linked post's headline:

"Churches refusing to perform same sex marriages may be denied liability insurance"

At this point, no carrier is refusing to actually underwrite and issue a policy to non-complying churches for the simple reason that it's not currently a part of the underwriting process. That is, there's no question on the app that reads "Do you refuse to perform gay weddings?" If and/or when a claim arises because of such refusal, the carrier would simply deny coverage.

Now, actually declining to write a policy in the first place is currently pretty speculative. But as Bill pointed out to me, such a scenario is not necessarily farfetched:

Imagine Acme Church Insurance Company with 50,000 policyholders, 10,000 of which get sued for refusing SSM, and all 10,000 of these claims are denied. That's a lot of ticked off customers, no? So what's the likelihood that the next application version's going to include a question about SSM, and if the answer's not "sure, all the time," then no soup policy for you.

Is that likely to happen in the next year or two? Probably not, but don't be surprised when it does happen a few years down the road.

Bill also brought up another very disturbing thought: many (most?) churches have Boards of Directors (or Elders, or Deacons, etc), and thus likely have D&O (Directors and Officers) coverage:

The other day, we looked at how health insurance (particularly group plans) will be impacted by the recent SCOTUS ruling on Same Sex Marriage (SSM). Now, the legal beagles over at Legal Insurrection have a very interesting post about the future of liability insurance in this new, enlightened age, and it's not pretty:

As usual when it comes to issues involving Property and Casualty (P&C), I turned to good friend and guru Bill M for his insights:

The reason that coverage in such circumstances would (likely) be declined is that it was an intentional act of violating the law. So if (when?) a church (or synagogue, or mosque) is sued for refusing to perform a SSM, the resulting lawsuit would not be covered. That also means the carrier has no "duty to defend" (basically: provide legal counsel).

Of course, any fines imposed by the state would also be excluded.

This is not quite the same as the linked post's headline:

"Churches refusing to perform same sex marriages may be denied liability insurance"

At this point, no carrier is refusing to actually underwrite and issue a policy to non-complying churches for the simple reason that it's not currently a part of the underwriting process. That is, there's no question on the app that reads "Do you refuse to perform gay weddings?" If and/or when a claim arises because of such refusal, the carrier would simply deny coverage.

Now, actually declining to write a policy in the first place is currently pretty speculative. But as Bill pointed out to me, such a scenario is not necessarily farfetched:

Imagine Acme Church Insurance Company with 50,000 policyholders, 10,000 of which get sued for refusing SSM, and all 10,000 of these claims are denied. That's a lot of ticked off customers, no? So what's the likelihood that the next application version's going to include a question about SSM, and if the answer's not "sure, all the time," then no soup policy for you.

Is that likely to happen in the next year or two? Probably not, but don't be surprised when it does happen a few years down the road.

Bill also brought up another very disturbing thought: many (most?) churches have Boards of Directors (or Elders, or Deacons, etc), and thus likely have D&O (Directors and Officers) coverage: